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Quarterly Report For The Financial Period Ended 30 June 2018

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Unaudited Condensed Consolidated Statements Of Comprehensive Income
For The Financial Period Ended 30 June 2018

Unaudited Condensed Consolidated Statements Of Comprehensive Income


Unaudited Condensed Consolidated Statements Of Financial Position
As At 30 June 2018

Unaudited Condensed Consolidated Statements Of Financial Position

Review of Performance for the Current Quarter and Financial Year-to-date

The Group total revenue for the financial year-to-date is RM21.86 million, which consists only IT business segment as the Group has deconsolidate the wholly-owed subsidiary, IDB Interactive Sdn Bhd ("IDB") effective 1 January 2017 from the Group's consolidated financial statements for the financial year ended 30 June 2018.

With the deconsolidation of IDB, the Group recorded a loss before taxation of RM17.76 million. This was mainly due to the loss on deconsolidation of RM0.58 million, the impairment of goodwill which derived from the acquisition of the online games segment of RM15.39 million as well as the fair value adjustment on financial assets of RM1.30 million.

The review of performance for the current quarter and financial year-to date by operating business segment is as follows :-

  1. IT Business

    The revenue for the current quarter is RM3.40 million compared to RM2.50 million in the correspondence quarter a year ago, a jump of 36%. With the higher revenue, the IT business segment has recorded a profit before taxation of RM1.3 million in the current quarter compared to a loss before taxation of RM0.33 million a year ago. This was mainly due to improve manpower utilization and productivity rate with the additional IT projects on hand.

    For the 18 months year to-date, IT business segment recorded a profit before taxation of RM 1.07 million. This was mainly due to improve manpower utilization and productivity rate with the additional IT projects secured during the year.

  2. Online Games

    We refer to the announcements made on 30 May 2018, 9 August 2018 and 10 August 2018 in respect of, amongst others, the cessation of support by appointed vendors for the online games business segment and material litigation commenced by the Company's wholly-owned subsidiary, IDB Interactive Sdn Bhd ("IDB") against Online E-Club Management Sdn Bhd, E-Club Interactive Sdn Bhd, EClub Hong Kong Pte. Limited and Yap Tet Soon (trading as Yap Outsourcing Services) ("Material Litigation"). IDB has in their statement of claim demanded the return and/or handover of all the business, financial and/or management documents, information and records pertaining to sales, purchases and the appointer reseller of the five (5) territories in the possession, custody and/or control of the defendants belonging to IDB ("Documents"). Following the commencement of the Material Litigation, IDB continued to request for the Documents but EClub Interactive Sdn Bhd via their letter dated 13 Aug 2018 denied any access to the Documents.

    In view that IDB does not have access to the Documents, the board of directors of the Group by reference to Section 250(2) of the Companies Act, 2016 are of the opinion that it is in the best interest of the Group to de-consolidate the financial statements of IDB effective 1 January 2017 from the Group's consolidated financial statements for the financial year ended 30 June 2018 pending the outcome of the Material Litigation.

    The total revenue of the online games segment of RM45.14 million together with the loss before taxation of RM9.43 million recorded in the cumulative quarter was deconsolidated effective 1 January 2017 from the Group's consolidated financial statements for the financial year ended 30 June 2018 as the Group was unable to ascertain the sales and purchases transactions without all the source documents and/or supporting documents to be returned by the defendants.

Future Prospects

The business environment of the Group remain challenging and competitive in the remaining year 2018. The management will continue to explore new business opportunity on its core activities in IT business to sustain the performance of the Group.